Baghdad traders protest new customs tariffs as Iraq wrestles with shrinking oil revenues

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BAGHDAD (AP) — Hundreds of traders and customs clearance company owners protested in central Baghdad on Sunday, demanding that Iraq's government reverse recently imposed customs tariffs that they say have sharply increased their costs and disrupted trade.

The new tariffs that came into effect on Jan. 1 were imposed as part of an attempt to decrease the country's debt and its reliance on oil revenues as oil prices have dropped.

Iraq faces debt of more than 90 trillion Iraqi dinars ($69 billion) — and a state budget that remains reliant on oil for about 90% of revenues, despite attempts to diversify.

But traders say the new tariffs — in some cases as high as 30% — have placed an unfair burden on them. Opponents have filed a lawsuit aiming to reduce the decision, which Iraq's Federal Supreme Court is set to rule on Wednesday.

The demonstrators gathered outside the General Customs Directorate Sunday, chanting slogans against corruption and rejecting the new fees.

“We used to pay about 3 million dinars per container, but now in some cases they ask for up to 14 million,” said Haider al-Safi, a transport and customs clearance company owner. “Even infant milk fees rose from about 495,000 dinars to nearly 3 million.”

He said that the new tariffs have caused a backlog of goods at the Umm Qasr port in southern Iraq and added that electric vehicles, previously exempt from customs duties, are now subject to a 15% fee.

“The main victim is the citizen with limited income, and government employee whose salary barely covers his daily living, those who have to pay rent, and have children with school expenses — they all will be affected by the market," said Mohammed Samir, a wholesale trader from Baghdad.

Protesters also accused influential groups of facilitating the release of goods in exchange for lower unofficial payments, calling it widespread corruption. Many traders, they said, are now considering routing their imports through the Kurdistan region, where fees are lower.

The protests coincided with a nationwide strike by shop owners, who closed markets and stores in several parts of Baghdad to oppose the tariff increase. In major commercial districts, shops remained shut and hung up banners reading “Customs fees are killing citizens."